The economic rapprochement between the two sides of the Nistru River became more evident in the recent past given the worsening of the economic situation in both of the areas. However, the situation worsened faster in the Transnistrian region than on the right side. Such conclusions are contained in the most recent issue of the magazine “Transnistrian Economic Reality”, which is produced by the independent think tank “Expert-Grup”, IPN reports.
According to the experts, the investment activity in 2015 decreased by 20.3% on 2014. The external trade declined on both of the sides, though the exports diminished more on the right bank (15.9%, as opposed to 14.7%), while imports fell more on the left side - (30.4%, as against 25%).
On the right side, the national currency depreciated by about 25% last year, while the nominal exchange rate of the Transnistrian ruble remains constant and represents 11.1 rubles per dollar. On the right side, the depreciation of the national currency fueled the inflationist pressure (rate of inflation was 9.7%). The Transnistrian region witnessed a deflation of 1.1%.
The economies from both sides of the Nistru face similar problems. In both of the cases, the economic growth models are not sustainable, being mainly fueled from external sources that are being used up (remittances and external financial assistance). Both of the economies are very small and are thus dependent on external markets (especially the EU and CIS) and thus face serious competitiveness-related problems.
The political instability on both of the sides became more evident amid the protests and probability of early elections on the right side of the Nistru and the presidential elections set for 2016 in Transnistria.
One of the authors of the publication Adrian Lupusor said these constraints caught both of the sides in a vicious circle of political economy. To get out of it, the public authorities should change their behavior, while the decision of December 18, 2015 to implement the DCFTA with the EU in the region is a positive step in this direction.
